SM nets P16.6B

SM is a household brand in PH

The country’s largest conglomerate SM Investments Corp. grew its six-month net profit by 9 percent year-on-year to P16.6 billion led by higher earnings form its property and retail businesses.

Excluding one-time items booked in 2016, recurring income increased by 16 percent in the first semester, the Sy family-led conglomerate disclosed to the Philippine Stock Exchange on Wednesday.

Consolidated revenues rose by 7 percent year-on-year to P181.6 billion in the first half.

“Even without the benefits of an election year, we saw sustained growth across all our core businesses, driven by the strong economy and resilient consumer sentiment. SM will continue to capture this momentum through nationwide expansion and by investing in high growth opportunities,” SM president Frederic DyBuncio said in a press statement.

The property business contributed the most to consolidated net income at 42 percent. This was followed by banks with 36 percent and retailing with 22 percent.

SM Retail, the only core business that is not separately listed on the stock exchange, reported a 6-percent year-on-year growth in first semester net profit to P5.2 billion on the back of a 6-percent increase in sales to P131.6 billion. This unit earned 4.4 centavos for every P1 worth of goods sold.

At end-June, SM Retail had a total of 2,357 stores, comprising of 58 department stores (The
SM Stores), 1,709 specialty stores, 50 SM Supermarkets, 44 SM Hypermarkets, 170 Savemore stores, 41 WalterMart stores and 285 Alfamart stores.

The food retail group pursued its aggressive expansion in both urban and rural communities
nationwide, adding 15 mid-sized format Savemore stores, two SM Supermarkets and two WalterMart stores. Meanwhile, convenience store chain Alfamart increased its number of stores by 75 as of end-June from 210 at the start of the year.

The SM Store opened one store in SM CDO Downtown in Cagayan de Oro in May 2017. As of the first half, the total gross selling area of all 58 department stores stood at 760,000 square meters.

Meanwhile, revenues from SM Retail’s specialty retail stores grew by 8 percent year-on-year to P31.6 billion in the first six months. Specialty retail brands include Ace Hardware, SM Appliance Center, Homeworld, Our Home, Toy Kingdom, Watsons, Kultura, Baby Company, Sports Central, Forever 21 and Body Shop.

It was earlier reported that flagship property business SM Prime Holdings grew its first semester net profit by 14 percent year-on-year to P14.4 billion on higher shopping mall rental and residential development revenues.

Among its equity investments portfolio, leisure estate and gaming firm Belle Corp. benefited from increased growth in the tourism sector, reporting a six-month consolidated net income growth of 93 percent to P1.8 billion.

On the other hand, banking arm BDO Unibank’s first semester net income was flat at P13.3 billion on lower trading gains and one-off expenses from the acquisition and consolidation of subsidiaries.

Another banking unit, China Bank, grew its six-month net income growth by 10 percent to P3.6 billion, driven by strong growth in its lending business and other core recurring income.

SM increased its investments in its subsidiaries in the first half with the P60 billion stock rights issue of BDO in January 2017 and P15 billion for China Bank in May 2017, as well as its acquisition of stakes in logistics company 2GO Group and Philippines Urban Living Solutions, the operator of a dormitel chain under the brand, “MyTown”.